The Consumer Financial Protection Bureau (CFPB) on Wednesday ordered Apple and Goldman Sachs to pay $89 million over mishandled transaction disputes and misrepresentations that impacted hundreds of thousands of Apple Card users.
The CFPB found a breakdown in how customer service for the Apple Card handled consumer disputes, as Apple failed to send tens of thousands of disputes to Goldman Sachs and when it did send them, the bank failed to abide by federal requirements for investigating the disputes.
The agency noted that the companies launched Apple Card despite warnings by third parties about technological issues with the Apple Card disputes system. That led to a lengthy wait for consumers to get money back from disputed charges and some had incorrect negative information added to their credit cards.
CFPB also found that Apple and Goldman Sachs misled consumers about interest-free payment plans for Apple devices, as many customers thought they would automatically be enrolled in interest-free payments but were charged interest and in some cases couldn’t see the interest-free payment option on the Apple website when using certain browsers.
APPLE, GOOGLE OWE WHOPPING TAX BILLS AND FINES DUE TO EU’S CRACKDOWN ON BIG TECH
The CFPB ordered Goldman Sachs to pay at least $19.8 million in redress and a $45 million civil monetary penalty, while Apple was ordered to pay a $25 million civil monetary penalty. It also banned Goldman Sachs from launching a new credit card unless it provides a credible plan that the product will be legally compliant.
“Apple and Goldman Sachs illegally sidestepped their legal obligations for Apple Card borrowers,” said CFPB Director Rohit Chopra. “The CFPB is banning Goldman Sachs from offering a new consumer credit card unless it can demonstrate that it can actually follow the law.”
GOLDMAN SACHS CEO DOWNPLAYS FIRM’S REPORT ON HARRIS’ ECONOMIC PLAN
“Apple Card is one of the most consumer-friendly credit cards that has ever been offered,” Goldman Sachs spokesperson Nick Carcaterra told FOX Business. “We worked diligently to address certain technological and operational challenges that we experienced after launch and have already handled them with impacted customers. We are pleased to have reached a resolution with the CFPB and are proud to have developed such an innovative and award-winning product alongside Apple.”
“Apple is committed to providing consumers with fair and transparent financial products,” an Apple spokesperson told FOX Business. “Apple Card is one of the most consumer-friendly credit cards available, and was specifically designed to support users’ financial health. Upon learning about these inadvertent issues years ago, Apple worked closely with Goldman Sachs to quickly address them and help impacted customers.”
“While we strongly disagree with the CFPB’s characterization of Apple’s conduct, we have aligned with them on an agreement. We look forward to continuing to deliver a great experience for our Apple Card customers,” the Apple statement concluded.
APPLE UNVEILS NEW IPAD MINI WITH AI CAPABILITIES
In November 2023, The Wall Street Journal reported that Apple proposed ending its credit card partnership with Goldman Sachs in the next 12 to 15 months.
The Journal had previously reported in the summer of 2023 that Goldman Sachs was in negotiations to transfer the Apple Card partnership to another financial services firm.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
